THE INVESTMENT OPTIONS FOR THE NEW YEAR

Future perfect 
THE INVESTMENT OPTIONS FOR THE NEW YEAR 

By Aditya Gadge 

Investment is defined as ‘the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income (dividend), or appreciation of the value of the instrument’. To be a successful investor, it is important that before you commit your hard- earned money, you understand the laws that govern investment growth. Understanding these allows us to focus on the most important factors that we can control. The value of an ongoing investment plan at any time in the future depends on the three key parameters of time, returns, and money committed. Naturally, increasing any of these parameters will increase the future value of your investment. For a long-term investment success, it is important that the investment scores high on the following parameters:
• Professional management
• Reasonable expenses
• Diversification
• Liquidity
• Tax benefits

Top 5 ELSS
One of the important rules of financial planning is to make maximum use of the tax laws for tax savings and ELSS provide the best opportunity, thanks both to the fantastic returns they generate and their tax saving capabilities.
•Canara Robeco Equity Tax Saver
• HDFC Tax Saver
• Franklin India Tax Shield
• Principal Personal TaxSaver
• Magnum Tax Gain

Top 5 insurance plans Insurance, as financial planning suggests, should be bought only for risk management and thus there is nothing better than plain vanilla term plans. Since the premium amount is used only for insurance, the biggest benefit of a term insurance policy is that it provides life insurance at the lowest possible price.
• Kotak Preferred Term
• Met Suraksha Plus
• LIC Amulya Jeevan -1
• Aviva Life Shield Plus
• Birla Sun life Term Plan

Infrastructure funds

 In the current financial year, new infrastructure bonds issued by LlC, IFCI, IDFC and other NBFC classified as Infrastructure Company and approved by RBI are covered under Section 8OCCF of Income Tax Act for income tax exemption for income up to 20,000 in a financial year. This is over and above the 1,00,000 allowed under Section 80C. The bonds are likely to carry an interest rate of 7-7.50 per cent. The interest earned from these bonds would be taxable.

NPS
In the absence of any social security instruments, NPS is an effective product for retirement planning. Any Indian citizen between 18 and 60 can start a New Pension Scheme account and can start investing any amount in it for a pension. There are multiple benefits like attractive investment schemes, professional record keeping and fund management, no entry and exit loads and the freedom to withdraw the facility as and when you choose under Tier II. Pension funds manage three separate investment schemes, each investing in a separate asset class. The investment by a NPS participant in equities is subject to a cap of 50 per cent.

Gold ETF
Investing in a Gold ETF instead of physical gold can help you avoid problems like impurity, risk of theft and expenses of locker and insurance. Gold ETs are also more tax- friendly than physical gold.
• UTI Gold ETF
• Kotak Gold ETF
• Quantum Gold Fund
• Reliance Gold ETF
• SBI Gold ETF
Bonds
To raise their pool of long-term resources, many banks come up with public issue of bonds at an attractive rate giving a clear indication of a general expectation about interest rates to firm up. State Bank of India recently came up with a public issue of bonds at a rate of 9.25 per cent for 10 years and 9.50 per cent for 15 years. There are at least a couple of more such issues expected in the coming months.